1)
Division | ||||
Total | East | Central | West | |
Sales | $1516000 | $366000 | $620000 | $530000 |
Variable expenses | 655320 | (366000*57%)= 208620 | (620000*37%)= 229400 | (530000*41%)= 217300 |
Contribution margin | 860680 | 157380 | 390600 | 312700 |
Traceable fixed expenses | 774000 | 261000 | 323000 | 190000 |
Divisional segment margin | 86680 | (103620) | 67600 | 122700 |
Common fixed expenses | 173000 | |||
Net operating income (loss) | $(86320) | |||
Common fixed expenses= Total fixed expenses-Traceable fixed expenses
= $947000-774000= $173000
2-a) Contribution margin ratio of West company= Contribution margin*100/Sales
= $312700*100/530000= 59%
Increase in sales= $530000*20%= $106000
Increase in contribution margin= Increase in sales*Contribution margin ratio of West company
= $106000*59%= $62540
Increase (decrease) in net operating income= Increase in contribution margin-Advertising expense
= $62540-27000= $35540 Increase
b) Yes, we would recommend advertising as it will increases the net operating income.
Check my work Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for...
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $1,623,000 691,960 931,040 1,024, eee $ (92,960) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: East $433,000 Division Central $630,000 West $560,000 Sales...
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $1,634,80e 580, 228 1,053,780 1,159,90e (105,220) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information Division East Central West $424,000 $68e,00 $530,e00 Sales Variable...
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,551,000 561,560 989, 440 1,088,000 $ (98,560) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East $351,000 Central $650,000 West $550,000...
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,634,000 655,900 978,100 1,076,000 $(97,900) In an efforto resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable fixed...
A) B) Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (los) $ 1,585,000 585,650 999,350 1,099,000 $ 99,650) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Sales Variable expenses as a percentage...
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: $ Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) 1,572,000 533, 120 1,038,880 1,143,000 (104,120) $ In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Sales Variable expenses as a percentage of...
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 1,579,000 Variable expenses 691,900 Contribution margin 887,100 Fixed expenses 976,000 Net operating income (loss) $ (88,900) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 449,000 $...
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: $ Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) 1,611,000 561,570 1,949,430 1,154,000 (104,570) $ In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales...
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: $ Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) 1,619,000 693,650 925,350 1,018,000 (92,650) $ In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales...
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: $ 1,612,000 Sales Variable expenses Contribution margin Fixed expenses 616,660 995,340 1,095,000 Net operating income (loss) (99,660) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division West $510,000 East Central Sales Variable expenses as...